The word for "married" in Danish is the same as the word
for "poison." The word for "sweetheart" in Danish is
the same as the word for "tax." In this paper, we expand on
the literature that documents a significant marital wage premium for men
in the United States to see if a similar differential exists for married
men in Denmark--or if the homonyms have perhaps less of a double
meaning.

The existence of a marital wage premium for white men in the United
States has been well documented empirically. Criticisms have focused on
researchers' failure to clearly ascertain why wages change with
marital status and on the imperfect nature of the data sets employed in
the analysis, which generally contain relatively few men who have never
married and incomplete marital histories. We use a large, 10-year panel
sample of young Danish men in order to address these concerns. We have a
complete relationship history for every respondent and a large fraction
of never-married men. Substantial U.S.-Danish differences in marriage
and childbearing behavior as well as in social norms regarding
relationships and intrahousehold specialization are exploited to
generate predictions regarding the Danish results that are tested in the
empirical analysis. Of particular interest are the prevalence of
cohabiting relationships in Denmark that allows us to test for wage
differences by type of relationship, the evidence that Danish households
are less specialized than U.S. households that allows us to explore the
nature of the marital wage differential, and the very different pattern
of childbirth and marriage that allows us to test for a distinct
fatherhood effect. If wages are directly linked to productivity and if
relationship type, intrahousehold specialization, and/or parenthood are
linked with market wage differentials, policymakers should be apprised
of the full cost of social legislation designed to alter these household
choices.

2. Literature Review

The observation that married men earn more than men who have never
married is not in itself surprising. Married men are typically older
than never-married men, and older men have more experience, hence higher
earnings, than their younger counterparts. Yet there also exists
substantial evidence (for a review of the U.S. literature, see Ribar
2004) that married men earn more than never-married men with the same
level of education, experience, and other observable characteristics.
This fact can be explained in a number of ways.

Men who marry may be more productive throughout their lives than
men who do not marry. This greater productivity makes them better
providers and hence better marriage partners. This possibility can be
explored econometrically either by simultaneously modeling both the
decision to marry and wages (Nakosteen and Zimmer 1987; Chun and Lee
2001) or by using panel data on wages to estimate fixed-effects models
that control for all unobservable, individual-specific, time-invariant
factors (an early example being Korenman and Neumark 1991), or by using
twins studies to control for twin-specific effects (Antonovics and Town
2004; Krashinsky 2004). Results indicate that there are differences
between men who marry and men who do not. Korenman and Neumark (1991)
conclude that 20% of the marital wage differential is attributable to
individual-specific and time-invariant factors. Gray (1997) reports
similar results using a cohort of men born in 1942-1952 but finds that
for younger cohorts in the United States (born 1958-1965), all the
estimated marital differential is attributable to fixed effects.
Krashinsky (2004) finds that controlling for twin-specific effects
explains the entire differential, but Antonovics and Town (2004) find
that twin-based controls for selection yield even larger marital wage
differentials.

The idea that marriage may change a man's productivity has
also received some attention in the literature. One theoretical
explanation is drawn from Becker (1991) and based on the fact that
individuals in joint households are more able to specialize than those
in single-person households. Men have historically specialized more in
the market sector and women more in the home sector. This leaves men
more time and/or energy to spend on market work after marriage. If this
translates to higher productivity on the job, then their earnings should
immediately rise. In this case, the level of wages will rise as men
marry but fall back down if/ when the marriage ends. The marital wage
effect will be temporary. Alternatively, men who marry may specialize by
increasing their investment in job-related human capital. In this case,
married men's wages may not rise immediately but will rise more
rapidly, and wage growth--but not necessarily wage level--will fall
if/when a marriage ends.

There is indirect empirical evidence from selectivity-controlled
estimates supporting both these specialization mechanisms in the United
States. Some researchers have found evidence that wages do rise more
rapidly for married men (Korenman and Neumark 1991; Gray 1997 for older
U.S. cohorts born 1942-1952; Stratton 2002), and some have found that
wages both jump and rise faster following marriage (Daniel 1991; Hersch and Stratton 2000). However, this evidence is indirect because it does
not actually capture behavioral changes in effort or time use.

Few data sets provide direct measures of productivity or time use.
Evidence that married men receive more training than unmarried men is
provided in Rodgers and Stratton (2005) but not found to explain the
marital wage differential. Mehay and Bowman (2005) provide direct
evidence of labor force productivity differentials between married and
unmarried men but do not examine wages. A number of researchers have
inferred that intrahousehold specialization will vary inversely with the
employment status/hours of the wife and so compared marital wage
differentials for men with employed wives to those for men whose wives
are not employed (Loh 1996; Hotchkiss and Moore 1999). Results are
mixed, with Loh finding men married to more educated wives faring better
in the labor market and Hotchkiss and Moore finding results that differ
depending on the husband's occupation. More direct evidence on
men's housework activities suggests that in the United States,
while men's wages are negatively related to their housework time,
controlling for men's time on housework does not explain the
marital wage differential (Hersch and Stratton 2000).

Other explanations for a male marital wage differential include
discrimination, marriage as a behavior-altering state that focuses men
on more productive activities, and a compensating wage differential
argument that suggests that married men favor income over other job
characteristics (for a more detailed summary, see Ribar 2004).
Parenthood also may generate effects if becoming a parent changes
men's behavior on the job. Most marital wage researchers control
for the presence of children in the household and fail to find a
significant impact (see, e.g., Korenman and Neumark 1991; Loh 1996).
Mehay and Bowman (2005) find mixed empirical results but conclude that
marital duration has an impact on performance that is independent of the
presence of children. One exception is Cornwell and Rupert (1997), who
find that fathers earn about 5% more than nonfathers in the United
States and hypothesize that, like married men, fathers modify their time
allocation decisions in a way that increases their market productivity.
Generally, however, in the United States, it may be difficult to
distinguish between marriage and fatherhood, as the latter so often
follows fairly closely after the former.

There are a number of problems with both the evidence and the
theory behind the marital wage differential as presented to date. One
concern with the selection hypothesis is that virtually all men
eventually marry. In the United States, 63% of all white, non-Hispanic
women are married by age 25, 81% by age 30 (Bramlett and Mosher 2002).
Those who never marry are but a small and likely unusual fraction of the
population.

Not only is this a problem with the hypothesis, but it also poses
problems empirically, as a marital wage differential can be identified
only by comparing married and not-married individuals. Samples including
persons of all ages are unlikely to include many never-married men.
Estimates based on youth cohorts have a better chance of including more
first-time marriages, but even these samples include a substantial
fraction of men who are married when first observed (78% in Korenman and
Neumark's 1991 seminal work, 76.2% in Gray 1997, 66.2% in Hersch
and Stratton 2000). In part this is due to sample selection criteria
that restrict the sample to men who have completed their education, but
the result is that, in general, estimates of the marital wage
differential rely a great deal not on first marriages but on
separation/divorce and remarriage for identification of the marital wage
premium (for a further discussion, see Cornwell and Rupert 1997).

In addition, much of the literature ignores cohabitation.
Exceptions include Schoeni (1995), who finds no effect of cohabitation
on earnings in Germany; Loh (1996), Stratton (2002), and Bardasi and
Taylor (2004), who conclude that any effect of cohabitation is
transitory; and Cohen (2002) and Richardson (2003), who find that
cohabiting men receive a smaller premium than married men. The work by
Stratton (2002) is of particular interest as it employs a data set that
has both panel data and cohabitation histories. Controlling for
individual-specific effects, Stratton finds that married men but not
cohabiting men earn significantly more than men not in a relationship.
Given the trend toward declining marriage and increasing cohabitation
rates over the past 30 years (Bumpass, Sweet, and Cherlin 1991), the
effect of cohabitation on men's wages warrants further attention.

3. What Can Danish Data Tell Us?

What contribution can an analysis of Danish data bring to this
literature? Data from the United States have provided some evidence of a
white male marital wage differential, but as data on actual job
productivity are typically unavailable, the nature of the differential
is more often inferred than positively identified. International data
may provide some additional insights, as there are substantial
cross-national differences in the timing and type of interpersonal
relationships, in the household division of labor, and in the timing of
paternity.

There already exists evidence that married men earn a premium in
many developed nations (Schoeni 1995). However, there also exists
evidence that the nature of the premium differs. Both Richardson (2003),
using Swedish data, and Bardasi and Taylor (2004), using British data,
report that while wages jump following marriage, they do not rise faster
following marriage. Indeed, Richardson finds some evidence that in
Sweden wage growth is lower for married than for unmarried men. Other
work by Ginther, Sundstrom, and Bjorklund (2006) looking at Swedish
parents finds that the entire marital wage effect is attributable to
selection. Denmark is much more similar to its Scandinavian neighbor
Sweden than to the United States as regards the nature of interpersonal
relationships, the household division of labor, and social welfare
policy. Thus, there is reason to expect that the Danish male marital
wage differential will differ from that observed in the United States.
No such evidence is yet available. Naur and Smith (1998), in an analysis
of gender wage differentials, provide some evidence that there is a
Danish male marriage premium (of approximately 4%), but while their work
differentiates between married and cohabiting men, it does not control
for the possibility of differential wage growth.

Differences in interpersonal relationships between Denmark and the
United States arise both in their timing and in their type. Men marry
later in Denmark than in the United States. Looking at men aged 25-29,
50.8% in the United States have been married compared to 18.1% in
Denmark. Even at age 30-34, 70.4% of U.S. men but only 46.3% of Danish
men report having been married. Overall, marriage appears to be a more
selective state in Denmark than in the United States, and thus the
selection effect of marriage may be greater in Denmark. (1)

One explanation why men in Denmark marry less often and later is
the greater prevalence of cohabitation. While couples in the United
States typically cohabit for only a short spell and often do so as a
prelude to marriage or following a divorce (Forste 2002), cohabitation
is a much more socially acceptable and enduring relationship in Denmark.
In 2001, 22% of all couple households in Denmark were cohabiting
(Statistics Denmark 2001), as compared with only about 6% in the United
States (Fields and Casper 2001). Looking at first cohabitations in the
United States, 21% of these couples split up, and 30% marry within one
year, while 10% split up and 3% marry within one year in Denmark. At the
end of three years, 39% have split up, and 35% have married in the
United States, while 38% have split up and 15% have married in Denmark.
The wage effects of cohabitation are likely to be greater in Denmark
than in the United States because the longer-lasting cohabitations in
Denmark are likely to be both more selective and to have more impact on
labor market productivity than cohabitations in the United States.

As our analysis here focuses exclusively on Danish data, it is
important to generate predictions for the impact of relationship type in
Denmark. While cohabiting relationships in Denmark are more enduring
than cohabiting relationships in the United States, cohabiting
relationships are less enduring than marriages in Denmark. While 2% of
first marriages end within one year and 13% within three years, the comparable figures for first cohabitations are 10% and 39%. Legally,
there are likely fewer differences between married and cohabiting
couples in Denmark than in the United States, but even in Denmark there
are substantial distinctions, particularly during the period captured by
our sample. (2) For example, cohabiting persons are treated like single
persons in determining inheritance, public income transfers, and social
benefits. This means that in some cases there is an economic incentive
to marry (income taxes) and in others there is not (transfer payments).
In the case of housing subsidies, there is no distinction between
married and cohabiting persons, as it is household, not individual,
income that determines these benefits. As in the United States, it is
easier to terminate a cohabiting relationship than a marriage. As
regards child custody following the dissolution of a relationship, joint
custody is the default for married couples, while the mother is given
preference in cohabiting households. Generally, despite the greater
prevalence of cohabitation in Denmark versus the United States, we still
expect marriage to be a more selective state than cohabitation.

The difference in the relative stability of marriages and
cohabitations also suggests there will be differences in intrahousehold
specialization. Couples in less stable relationships will likely engage
in less intrahousehold specialization. This is particularly likely if
there is any cost associated with specialization. To the extent that the
relationship wage differentials are the result of a productivity change
associated with intrahousehold specialization, we predict that the
productivity change associated with cohabiting relationships will be
smaller than the productivity change associated with marriage. Thus, any
jump in wages or wage growth should be smaller for cohabiting than for
married men.

The different nature of relationships in Denmark generates some
wage predictions; evidence of cross-national differences in
intrahousehold specialization leads to others. There is some evidence
that the degree of specialization even in married households may be
lower in Denmark than in the United States. In the 1990s, Denmark (joint
with Sweden) had the highest female labor force participation rate in
the OECD (see Jaumotte 2003). Further, women entering the labor market
during the 1980s and 1990s were typically working full time, not part
time like earlier generations. Recent evidence shows that Danish women,
unlike women in most other countries (Smith et al. 2003), do not reduce
their labor supply significantly when they become mothers, except during
maternity leave. By way of contrast, the labor force participation rate
for married women in the United States with children under the age of
three was only 58.0% in 2002, while it was 80.5% for married women with
children aged 14-17 (Statistical Abstract of the United States 2003).
One reason why Danish households appear to engage in less labor
market/nonlabor market specialization is that the Danish public sector
has taken over a large part of the care work for children, the sick, and
the elderly.

International comparisons based on time use surveys also show that
Danes (jointly with Swedes) are less likely to specialize in household
production activities (Bonke and Koch-Weser 2003). In Table 1, the
development of the U.S. and Danish gender distribution of housework is
shown. In 1965 there appeared to be more specialization within Danish
households. In that year, Danish men contributed only 10% as much time
toward housework as women, while in the United States men contributed
about 30%. In both countries, the gender division of household labor has
become more equal over time. But this change has been more dramatic in
Denmark. By 1985, intrahousehold specialization, as measured by the
ratio of male-to-female housework hours, was equal between Denmark and
the United States. By 2003, Danish households appeared to be less
specialized than U.S. households. Furthermore, these changes have
entailed much more significant behavioral changes on the part of Danish
men. On average, men in the United States reported spending the same
amount of time on housework in 1985 and 2003, while men in Denmark
increased their housework time by half. With less intrahousehold
specialization, Danish men may experience a smaller increase in
productivity following marriage than U.S. men. (3) This would suggest a
smaller jump and/or a smaller change in the growth rate of earnings
following marriage for Danish as compared to U.S. men.

Finally, while there is little evidence that fatherhood influences
wages in the United States, it may be the case that becoming a father is
a more significant turning point in the lives of Danish men than either
marriage or cohabitation. One hypothesis might be that specialization
within the household really starts or changes when the spouse (mother)
enters her first maternal leave period following childbirth. While any
maternity leave available in the United States is so short lived that it
would make little sense to reallocate household tasks, in Denmark there
is an almost 100% coverage of publicly funded maternal leave, which
since 1984 has had a duration of 26 weeks and since 2002 a duration of
one year. This leave introduces a major "shock" to Danish
families. Whether this shock introduces a temporary or a permanent
change in behavior remains to be seen, but fatherhood rather than
relationship type may be more closely linked with wage changes in
Denmark. As with marriage, there are also significant differences
between the United States and Denmark regarding the timing of fatherhood
and marriage. They are not nearly as closely linked in Denmark as in the
United States. Thus, it may also be easier to identify the effect of
fatherhood on men's wages in Denmark than in the United States.

4. Data

In this study, we use a large panel sample of young Danish men. All
our data come from official Danish registers. These are governmental
records akin to U.S. Social Security or Internal Revenue Service-based
data matched to local marriage and school records. These data include
information on earnings and employment as well as marital and parental
status for all residents of Denmark. Our initial sample consists of a
10% sample of the Danish-born population of men born between 1966 and
1975 inclusive--a total of 37,881 men aged 18 or younger in 1984.
Register data on these individuals is available annually from 1984 until
2001, yielding 564,788 observations on men aged 16-35.

Marriage histories are obtained directly from official
administrative records that record precise dates of marriage and divorce
and so provide much more accurate data than respondent surveys, which
are dependent on personal recall. Studies of the marital wage
differential typically treat separated and divorced couples similarly,
as specialization is contingent on having a partner in residence. We
follow this protocol and classify married men whose spouse is not
present as separated if the spouse does not return in the following
year. Men who reside with an unrelated female who is within 15 years of
age are classified as cohabiting. This is the definition employed by
Statistics Denmark. Coresident partners are each assigned a unique
identifier that enables us to determine whether the partner changes from
year to year, but no further partner information is available. Because
coresidence information is available only annually, cohabiting
relationships that last less than one year will be undersampled. Such
relationships are, however, unlikely to have any substantial influence
on earnings, so the loss is relatively minor. In addition, as
individuals are not directly asked the nature of their relationship with
nonmarital partners, cohabitation is measured with some error. Roommates
may be incorrectly classified as cohabiters, and individuals who have
substantially older partners or cohabiting partners who maintain a
separate legal address may be incorrectly classified as noncohabiters.
Comparison of register and survey data from another Danish source (the
2001 Danish Time Use Survey) suggests that while more cohabiting persons
are misclassified as single than vice versa, the margin of error is very
small. In general, the Statistics Denmark classification is deemed
accurate.

As the data allow us to distinguish between different partners, we
can observe partner changes and identify cohabiters who go on to marry.
As we observe individuals from a very young age, we are able to
construct a very comprehensive history of both marriages and
cohabitations for every respondent. This is in contrast to Richardson
(2003), who has information only on the duration of the current
marriage, no complete marital history, and no information on how long
any cohabiting couple has been together, and to Stratton (2002), who has
only incomplete cohabitation records. Restricting the sample to those
not missing information on marital status or history, to those not
presently widowed, to those never observed in a gay union, and to those
who are not fathers when first observed reduces our sample size by less
than 100 men to 548,054 observations on 37,802 individuals.

Employment data are also obtained from the Danish register. These
official records report earnings, education, job experience, occupation,
and industry. In order to keep as comprehensive a sample as possible, we
do not restrict our wage analysis to those who have completed their
education. However, in order to analyze wages, we do restrict our
analysis to individuals for whom we have information on education,
occupation, industry, and labor market experience; who have wage reports
of between 40 and 800 Danish kroner (DKr) per hour (between
approximately 5 and 96 U.S. dollars); who worked more than 20% of the
year (about 320 hours); and who are not self-employed. The hours and
self-employment restrictions are necessary in order to reliably
construct hourly wage information. Further, all individuals who are
observed only once are excluded, as they contribute nothing to panel
estimates. This leaves us with a primary sample of 297,938 observations
on 33,798 individuals. Nonemployment accounts for almost half the
observations lost at this stage, lack of a reasonable wage measure
accounts for another quarter, and the rest are dropped because they are
observed only once. In order to more nearly match restrictions imposed
in the U.S.-based literature, a second sample that excludes those who
have not completed their education and those who worked less than 80% of
the year (about 1280 hours) is constructed. As about 18% of our sample
is still enrolled at age 25, this sample is substantially smaller,
containing 172,883 observations on 24,951 individuals.

Sample statistics for selected variables in the larger sample of
33,798 individuals are reported in Table 2 for both the 2001 cross
section and the pooled panel data set covering the period 1984-2001. In
the Appendix, sample statistics for all variables included in the
analysis are shown. According to Table 2, as of 2001, 34% of the 25,548
men in the sample were married, 34% cohabiting, and among those men not
observed in a relationship, 37% had previously been cohabiting and 8%
married. Thus, even in the last year of the panel, cohabitation is
clearly more widespread than legal marriage. In 2001, married men earned
on average 127 DKr hourly ($15.27 2001 U.S.), compared to only 117 DKr
($14.06) and 112 DKr ($13.46) for cohabiting and single men. These raw
statistics indicate that married men earned 13% more and cohabiting men
4% more than men not currently in a relationship. Part of this raw
marital wage differential is certainly attributable to the fact that the
married men were, on average, about two years older than the nonmarried
men.

Table 3 presents statistics pertaining to changing marital status,
to fatherhood, and to educational enrollment status. At the age of 18,
almost none of the 33,798 individuals who are included in this study
were married (0%), and only 2% were cohabiting. By age 35, 53% were
legally married, and 24% were cohabiting. More than 2% are in a
relationship when they first appear in our estimation sample because to
enter our sample they must be employed, and some do not begin work until
a later age. However, even when we restrict the analysis to those in our
estimation sample who have completed school, only 5% are married and 27%
cohabitating when first observed. As a result, we are able to achieve a
cleaner identification of the marriage and cohabitation wage
differentials than was possible in previous studies where a majority of
the sample entered married. A comparison of the fraction of married men
and of fathers demonstrates what we claimed earlier--that fatherhood
does not closely follow marriage in Denmark. Indeed, fatherhood seems to
precede marriage in Denmark, as the fraction who are fathers at any age
always exceeds the fraction who are married. Finally, Table 3
demonstrates the prevalence of late enrollment in Denmark. Fifty-one percent of the men were enrolled in school at the age of 18, and 10%
were enrolled at age 27. Fortunately, almost all the men had left the
educational system by age 35. (4) Of course, since we restrict this
sample to individuals with "reliable" wage information who
were employed for at least 20% of the year, Table 3 is not
representative of all young Danish men. A substantial number of
full-time students who do not have a job are excluded.

where [X.sub.it] is a vector of explanatory variables and
[Z.sub.it] is a vector of family status variables. The subscripts i and
t index the individual and time, respectively; [[alpha].sub.i] is the
unobserved heterogeneity term, assumed to be individual specific, time
invariant; and [[epsilon].sub.it] is an error component, Nid(O,
[[sigma].sup.2.sub.[[epsilon]). The explanatory variables include five
industry dummies, eight occupation dummies that take into account
changes in occupational designations beginning in 1996, two region
dummies, four education dummies, and quadratic measures of actual labor
market experience. The vector of family status variables, [Z.sub.it],
includes indicators for mutually exclusive marriage, cohabitation,
divorce/separation, and past cohabitation; quadratic duration measures
for these states; and variables reflecting the age and presence of
children and of fatherhood. While we report primarily on estimates of 7
in what follows, explanatory variables X are included in every
specification, and full model results are available on request.

Robust standard errors corrected for clustering at the individual
level are reported for all the pooled ordinary least squares (OLS)
models. If, however, the individual specific component, [[alpha].sub.i],
is correlated with any element of X or Z, then OLS estimates of [beta]
and [gamma] will be biased. The particular concern here is that men who
marry may be more productive (have a higher [alpha]) than men who do not
marry. In this case, the dummy variable identifying married men will be
positively correlated with [alpha], and the impact of marriage on wages
will likely be overstated. Nevertheless, we begin by reporting both OLS
and selection-corrected results in order to gauge the importance of the
selection correction.

We replicate the standard marital wage equations in which only
dummy variables identifying men who are currently married or are not now
married but have been in the past (divorced) are included in Z. Table 4,
columns 1 and 2, shows pooled OLS and fixed-effects estimates for the
sample of young Danes working full time who have completed school
(sample 1). A small but significant marriage premium of about 2% is
found in the pooled OLS regressions, but when controlling for unobserved
individual effects, that is, selectivity into marriage, the marital wage
premium seems to disappear. Only for those individuals who divorce are
wages significantly different (lower) than for those individuals who
have never been legally married. These results indicate a much lower
marital wage premium than typically found in U.S. studies.

However, these findings are in part due to the specification of the
model. In columns 1-2, the excluded category contains both single and
cohabiting men. In columns 3-4, we treat married and cohabiting men the
same, comparing all partnered men and all men not currently partnered
who have been in the past (divorced or previously cohabited) to all
never partnered men. This treatment causes the estimated fixed-effects
relationship wage premium to become significantly positive though
small--about 1% for both currently married/cohabiting men and men who
are not now in a relationship but have married or cohabited in the past.
Finally, columns 5-6 show the estimated coefficients from a
specification in which marriage and cohabitation are treated as distinct
relationships. In this specification, the type of current relationship
is identified and, for those not currently in a relationship, the most
recent type of relationship. As found in Stratton (2002), the
cohabitation premium is smaller than the marriage premium (p-values for
a test of equality are 0.000 in both specifications). Pooled OLS
estimates show a marriage premium of 4.2% (almost double that observed
when not controlling for cohabitation status) and a cohabitation premium
of 2.5%. These estimates are smaller than those observed in the United
States, which are often on the order of 8-14%, but about half the
differential is explained by the smaller wage dispersion in Denmark.
Figures presented in Datta et al. (2006) indicate that a Danish wage
differential of 4.2% is roughly equivalent to a 6.5% wage differential
in the United States. The remaining differential may be attributable to
the fact that Danish households specialize less than U.S. households. As
predicted, the selectivity corrected premia are substantially smaller
than the OLS premia, indicating that selectivity effects are quite
important for this group of young men working full time.

Sample 1 is a sample of young men working full time who have left
the educational system either without a formal education or with a
completed education. As a large number of Danish men in the age-group
20-30 years are still enrolled in school, this selection mechanism tends
to oversample low-skilled, uneducated men. Although we control for
education and occupation, the estimated marriage premia found in columns
1-6 may be misleading because of potential unobserved (time varying)
factors. (5) In columns 7-12, the same models are estimated using a
sample of all young men for whom we observe reliable wage information
(sample 2). This sample includes students who work while enrolled in
school, a situation that is very common among Danish students. (6)
Extending the sample clearly has a positive effect on the estimated wage
premia from marriage and especially cohabitation in all specifications.
The marriage premium in the final specification (column 12) is 1.6%, 30%
higher than sample 1 estimates, and of the same magnitude for
cohabiters, indicating that married and cohabiting men earn the same
wage premium--as long as they stay with their partners! If they
separate, those who were cohabiting experience no wage loss, while those
who were legally married see their wages fall back to the level of men
who have never married. A comparison with column 11 indicates that
selection accounts for about two-thirds of the marital premium and 50%
of the cohabitation premium. As hypothesized, the selection effect is
substantial and larger for married than for cohabiting men.

The experience accumulated in jobs as students may have a different
effect on wages than experience accumulated in jobs after school
completion. If some men marry only after completing their education, we
may mix the effects from marriage and cohabitation with effects from
differential wage growth following completion of school and education.
Therefore, to allow the model to be more flexible with respect to the
effect of experience, we split the experience variable into experience
accumulated before the highest observed level of education was completed
and experience accumulated after completing education. Selected
coefficients from this estimation are shown in Table 5. As expected, the
wage effect of accumulated experience from "student jobs" is
smaller than the wage effect of experience accumulated after completing
education. The more flexible specification of the wage function matters
for the relative size of the estimated wage premia for legally married
and cohabiting men. The premium decreases from 1.6% to 1.4% for legally
married men, while it increases from 1.6% to 2.0% for cohabiting men.
For those who divorce and for cohabiting couples that split, the
difference between a legal marriage and cohabitation seems even more
pronounced. Men who divorce earn about as much as men who have never
been in a relationship, while men who were formerly cohabiting earn
about 2% more. This differential may be related to the nature of the
intrahousehold specialization effect. Married men may experience a boost
in immediate productivity, while cohabiting men invest more time in
enhancing future productivity. To explore this possibility, it is
necessary to control for time married and cohabiting as well as the
state itself.

In Table 6, we extend the preferred flexible wage model that
includes separate pre- and posteducation experience measures with
measures of the duration of different marital and cohabitation states
(column 2) and, additionally, their square terms (column 3). Taken
together, these results indicate that there is little evidence of
intrahousehold specialization benefiting married men in the long run.
Marriage does lead to an immediate increase in earnings, which may be
attributable to specialization that immediately increases time and/or
energy on the job. However, this wage boost at least partially
disappears when the marriage ends. Furthermore, wages do not rise faster
for married men but, as in Sweden (Richardson 2003), rise more slowly.
(7) We hypothesized that, because there appears to be less
intrahousehold specialization in Denmark than in the United States,
there would be less or perhaps no differential wage growth following
marriage. Our results go beyond the predictions of theory, perhaps
suggesting that marriage reduces Danish men's investment in
market-related human capital. This contrasts with the results for
cohabiting men who experience an immediate and permanent boost in wages
and for whom there is some evidence that wages rise faster but at a
diminishing rate. It is this difference in wage growth during the
relationship between cohabiting and married men that drove the
previously observed postcohabitation premium. At the same time, wage
growth is even slower after couples break up than it is during the
relationship itself. As these results control for selection, they
suggest that breaking up and returning to the single life may reduce
productivity on the job--though this effect ceases with the commencement
of the next relationship.

Alternative specifications (results available on request) were also
tested. Specifications controlling only for time with the current
partner yield similar results, and wage growth patterns appear to be
similar for past and current relationships. When we restrict the sample
to only never-married men, our estimates of the impact of cohabitation
on both the level and the growth rate of wages are as reported in the
paper. When we restrict the sample to men in a relationship, we find
very little difference in the level of wages for married versus
cohabiting men and a slower rate of wage growth both during and
following marriage as compared to cohabitation. These results are
consistent with those reported for the full sample. Overall, sensitivity
testing suggests that the results reported here are robust.

These results provide evidence of a small but statistically
significant relationship wage premium in Denmark for young men. This
premium is somewhat smaller than the marital premium found in U.S.
studies and is negatively, not positively, associated with the duration
of the relationship. As expected, we find that selection has a smaller
impact on cohabitation than on marriage, but, unlike Stratton (2002), we
find that cohabiting men do receive a wage premium even after
controlling for selection. This is likely due to the different, more
enduring cohabitations observed in Denmark that do encourage some
behavioral changes. (8)

To pursue this hypothesis further, we finally analyze whether the
small observed marital and cohabitation wage premium of about 1.5-2% is
really a premium to having a partner or whether it may instead reflect a
childbirth-related premium captured because of the relation between
marriage/cohabitation and childbirth. The relation between marriage and
childbirth is less pronounced in Denmark than in the United States and
so is more easily estimated in Denmark. For simplicity, we drop the
quadratic duration terms as we add fatherhood-related variables. In
Table 7, column 2, we include an additional variable to identify
households with children aged 0-17 years. Apparently, the presence of a
child has no significant effect on the estimated relationship wage
premium. However, when adding more detailed information on the age of
the children, we find that the age matters. The presence of a child less
than the age of three increases men's wages, but when the child
passes the age of three, the positive initial effect becomes a
significant negative effect. Furthermore, the effect of marriage and
cohabitation seems to decrease slightly when controlling for the
presence of children in different age categories.

Paralleling our controls for relationship duration, in our final
specification we include a variable measuring the duration of
fatherhood. (9) Including this variable reduces the estimated
relationship premia further, especially for legally married men, but the
premia remain statistically significant at between 1.2% and 1.5%, and
wages do not appear to drop back down when the relationship ends,
suggesting that marriage and cohabitation are associated with a
permanent jump in productivity. This jump is not attributable to
specialization that permits individuals to spend more time/energy on the
job only while in a relationship, as such an effect would end when the
relationship and such specialization ends. Nor is the change associated
with specialization that results in increased investment in job-related
human capital, as that would be reflected in higher wage growth during
marriage. There is no evidence of any wage growth differential. Indeed,
the negative impact of relationships on wage growth observed in previous
specifications appears to be attributable to fatherhood status rather
than to the relationship itself. Only postrelationship wage growth
remains significantly different from wage growth for those never
married, and that is negative, potentially indicating reduced
investment. These results are robust to an alternative specification in
which marriage and cohabitation are not distinguished from one another
(results available on request). Formal tests, however, reject this
specification in favor of one that allows marriage and cohabitation to
have distinct wage effects. The results regarding marital and
cohabitation status in Table 7 are also quite robust to specifications
including interaction terms between marital/cohabitation status and the
child-related variables (results available on request). Relationship
duration has no relation to earnings, but wages decline with time
postrelationship. The interaction terms do indicate, however, that while
married men experience a fatherhood penalty, it may be somewhat smaller
than that experienced by cohabiting men.

As suggested earlier, having a child has a positive initial effect
on wages that disappears within one to two years. This result may
indicate that fatherhood makes men more responsible and productive at
their job but only temporarily, that Danish employers consciously or
unconsciously reward new fathers, or that fathers in Denmark bear
substantial child care responsibilities following the period of
extensive maternal leave offered by the Danish social welfare system.
The fact that there is an initial boost in earnings following the first
childbirth leads us to believe that the latter explanation may be the
most accurate, as the period of maternal leave may provide the father
with an opportunity to spend more time investing in the market.

If the father has this opportunity with the first birth, however,
there is reason to suspect that he may also have this opportunity with
later births, and if childbirth and marriage or cohabitation are
correlated, such a "birth effect" may be driving the observed
jump in wages at the onset of a relationship. To explore this
possibility, we examined the frequency with which marriages and
cohabitations begin in the same year as a child is born. We find that
20% of all marriages occur in the same year as the man first becomes a
father and that another 7% of all marriages occur in the same year as
another child is born. Childbirth and cohabitation are far less likely
to occur in the same year, with only 8.5% of cohabitations occurring in
the same year as a first childbirth and less than 1% occurring in the
same year as a subsequent childbirth. Dropping those men who begin a
relationship in the same year as they become a father so as to avoid any
confusion of a relationship effect and a childbirth effect, we are able
to replicate the results reported in Table 6 (results available on
request). Our results regarding marriage and cohabitation in Denmark are
not attributable to the generous maternity leave policies found there.

To round out our analysis, we reestimated the final specification
from Table 7 with and without controls for cohabitation and for fixed
effects (results available on request) in order to determine if the
results we reported earlier in the paper hold as well for this, our
preferred specification. As before, we find evidence that failure to
control for cohabitation (at least in Denmark) substantially biases OLS
estimates of the marital wage premium for men--reducing the effect by
over half. Also as before, we find that selection explains just over
half the cohabitation effect and over two-thirds of the marital effect
on wages. This supports our hypothesis that marriage is a more selective
state than cohabitation. We also examined the data for evidence that it
is perhaps not only wage level but also wage growth that predicts
selection into marriage. There does not appear to be clear support for
such a selection mechanism. Using a set of men not in a relationship
before age 22, we find on average lower wage growth between the ages of
21 and 22 for those who marry as compared to those who remain unattached
in any of the next three years. Using a set of men not in a relationship
before age 23, we find a slightly higher wage growth between ages 21 and
23 for those who marry in the next year or two than for those who do not
marry, but the differences are not overwhelming.

6. Conclusion

In this study, we use data from Denmark to shed light on the nature
of the male marital wage differential. We begin by presenting evidence
that differences between Denmark and the United States in interpersonal
relationships, in the intrahousehold allocation of time, and in parental
responsibilities generate some predictions regarding relationship wage
differentials in Denmark. Specifically, we predict that while marriage
is still likely to be a more selective state than cohabitation in
Denmark, the net relationship differential and in particular the
component not attributable to selection is likely to be smaller in
Denmark than in the United States because of the more egalitarian division of time in Denmark. We also posit that fatherhood may have a
greater impact on Danish men's earnings than either marriage or
cohabitation because of the generous maternity leave offered in Denmark
that may promote specialization. We then introduce a panel data sample
of Danish men that overcomes several data-related problems common with
marital wage studies. Specifically, our data consist of a large sample
of men so young that few enter the sample with experience in a
relationship and for whom we have complete marital histories,
substantially complete cohabitation records, and full wage information
for up to 18 years from a reliable government-based data source. Thus,
our results are not as subject as those from previous studies to missing
data or errors-in-variables bias or to the criticism that the marriage
effect is derived primarily from the effects of divorce or not
adequately distinguished from cohabitation.

Overall, we find substantial support for our hypotheses. OLS
estimates indicate that there is a relationship premium of between 3.2%
and 4.0% in Denmark. This premium, as predicted, is smaller than that
observed in the United States. Relationship type is important in that
failure to control for cohabitation reduces the estimated marital wage
differential by over half in Denmark because cohabiting men do share
some of the wage benefits enjoyed by married men. Thus, U.S. researchers
should be forewarned that controlling for cohabitation may become
important in the United States as cohabitation there becomes
increasingly common. When the OLS differential is split into selection
and nonselection components, we find, consistent with our expectations,
that while selection into cohabitation is important, it constitutes a
smaller fraction of the cohabiting as compared to the marital wage
differential in Denmark.

After controlling for selection, there remains a small positive and
significant "relationship wage premium" of about 1.5%. Given
the evidence that Danish households specialize less than U.S.
households, the larger marital wage premium observed in the United
States may be attributable to increased productivity as a result of
greater intrahousehold specialization. When controlling for fatherhood,
this relationship premium appears to consist of a one-time jump in
wages. Such a jump may be attributable to specialization that increases
productivity immediately, or it may be attributable to behavioral
changes that arise with the advent of a serious relationship. It is
difficult to disentangle these effects, but the fact that wages do not
fall far or at all when the relationship ends suggests more of a
permanent behavioral effect. More importantly, we do not find evidence
of faster wage growth for Danish men in a relationship. An explanation
consistent with these findings is that Danish men who enter a
relationship do not invest additional time in market-related human
capital, perhaps because, with the more egalitarian division of
household tasks in Denmark, they do not have much additional time. Taken
together, these results provide indirect evidence that relationship
types and household choices (particularly regarding time use) influence
market-based productivity. Thus, policy directives that influence
household decisions in these areas may have consequences in the
marketplace for men. However, while encouraging intrahousehold
specialization may increase men's productivity in the marketplace,
it may have an adverse effect on women. Further research on the
consequences for women is necessary before making any policy
recommendations.

Of perhaps greater interest are our findings regarding fatherhood.
Our results show that Danish men receive a "fatherhood"
premium during their first few years as fathers but that this premium is
rapidly consumed by lower postfatherhood wage growth. Since we control
for (time constant) selection effects by estimating fixed-effects
models, we suspect that the initial jump in wages may be attributable to
the increased intrahousehold specialization made possible by
Denmark's generous maternity leave policy. This leave may
temporarily change behavior. However, a comparison of direct child care
time by Danish parents indicates that fathers contributed 0.65 hours per
hour spent by mothers in 2001 (Danish 2001 Time Use Survey), while
Bianchi, Wight, and Raley (2005), using figures from the American Time
Use Survey 2003, reported that U.S. fathers contributed even less time
and only half the time spent by mothers. Thus, there is evidence that,
overall, Danish households specialize less in child care as well as
household production. The observation that wage growth is lower for
Danish fathers than nonfathers suggests that Danish fathers may be
diverting time from on-the-job training toward child care. More
information on the duration of maternity leave taken and the time use
patterns of Danish men before and after childbirth is needed to explore
the fatherhood effect further, but our findings show that while
relationships may not be "taxing" for men in Denmark,
fatherhood may be.

We are grateful to Mette Kornvig, Astrid Wurtz, and Camilla Osterballe Pedersen for very helpful research assistance. We gratefully
acknowledge financial support from the Danish Social Research Council,
FSE. Leslie Stratton also gratefully acknowledges support from a 2005
Summer Research Grant from the Virginia Commonwealth University School
of Business. Note that these data, like U.S. Social Security records,
are not publicly available because of their detailed and sensitive
nature.

Received June 2005; accepted November 2006.

References

Antonovics, Kate, and Robert Town. 2004. Are all the good men
married? Uncovering the sources of the marital wage premium. American
Economic Review 94:317-21.

Bianchi, Suzanne, Vanessa Wight, and Sara Raley. 2005. Maternal
employment and family caregiving: Rethinking time with children in the
ATUS. Paper presented at the ATUS Early Results meetings, North
Bethesda, MD.

Bonke, Jens, and Elke Koch-Weser. 2003. The welfare state and time
allocation in Sweden, Denmark, France and Italy. In Changing life
patterns in Western industrial societies, edited by Janet Zollinger
Giele and Elke Hoist. New York: Elsevier, JAI, pp. 231-53.

(1) All U.S. figures on first marriage and first cohabitation come
from Bramlett and Mosher (2002). These statistics come from the 1995
wave of the U.S. National Survey of Family Growth. Danish marriage
statistics come from Statistics Denmark (http://www.statistikbanken.dk)
and are based on 2002 statistics. Danish cohabitation statistics come
from our own sample.

(2) More recently, Denmark has been moving in a direction similar
to Sweden and reducing the legal distinctions between cohabiting and
married couples.

(3) One explanation for this observed difference in time allocation
between Danish and U.S. men may be the large difference in tax pressure
between the two countries. The overall tax pressure in Denmark has
increased during the latest decades to a level of about 50%, while the
U.S. level is about 30%. Schettkatt (2003) shows that a considerable
part of the difference between time allocation in the United States and
Germany can be explained by the tax wedge in the two countries. Since
the tax wedge is larger in Denmark compared to Germany, this result is
expected to carry over to Denmark.

(4) We assume that individuals who are observed not enrolled at the
age of 26 have completed their education. This assumption is necessary
because the youngest men in our sample are age 26 when last observed in
2001. Evidence from our oldest birth cohorts indicates that very few
individuals reenroll after the age of 26.

(5) As an alternative, we might have modeled the selection into
sample 1 explicitly. However, it is difficult to identify this selection
because we would have to find variables that affect the educational
decision but not the wage level. Therefore, we prefer to include all
observations but use a flexible wage specification, which allows the
experience profile to change when education is completed.

(6) We do not include an indicator for part-time work in the
estimations shown because part-time work in Denmark is typically paid
according to the same pay scales as full-time work. So, controlling for
education and occupation, part-time work is not found to have a negative
effect on hourly wage rates (see, e.g., Datta Gupta and Smith 2002).

(7) Controlling for quadratics in pre- and posteducation experience
as well as time married clearly risks introducing multicollinearity.
However, results (available on request) show that neither the magnitude
nor the statistical significance of the experience measures changes
substantially when controls for relationship duration are added to the
specification.

(8) We find smaller premiums than those reported for Sweden, where
Richardson (2003) found a marital wage premium of 8.5% and a
cohabitation premium of about half that size. One reason for this
differential may be that we analyze much younger birth cohorts of men
than Richardson and that, for these cohorts, the changing role of women
and families (less specialization and more market work for women) is
much more pronounced than in older birth cohorts. Richardson finds
evidence of declining male marital wage premiums in Sweden during the
last three decades that could support this hypothesis.

(9) Coefficient estimates and standard errors to the labor market
experience variables change very little with the addition of this
variable. Collinearity with experience is not a problem.